Proceedings After Original Registration: Voluntary DealingsA. Voluntary and Involuntary Registration

VOLUNTARY REGISTRATION-refer to deeds, instruments or documents which are the results of the free and voluntary acts of the parties. Example: Sale Mortgage Lease Trusts Power of Attorney

INVOLUNTARY REGISTRATION-refer to such writs, order or process issued by a court of record affecting registered land which are not the willful acts of the registered owner and which may have been executed even without his/her knowledge or against his/her consent.

Example: Attachment Levy upon execution Lispendens (notice of pending litigation)DISTINCTION

voluntaryinvoluntary

In voluntary registration of documents/instruments, the holder of a certificate of title, presents and files a duly notarized and valid deed of sale and the same is entered in the daybook (primary entry book) and at the same time he /she surrenders or presents the owners duplicate certificate of title covering the land sold and pays the registration fees.

An entry thereof in the day book is a sufficient notice to all persons even if the owners duplicate certificate of title is not presented to the Register of Deeds.

B. NECESSITY AND EFFECTS OF REGISTRATION IN GENERALNational Housing Authority Vs. Basa Jr.Facts: Spouses Augusto and Luz Basa loaned from NHA the amount of P556, 827.10 secured by a real estate mortgage over their properties covered by Transfer Certificates of Title (TCTs) Nos. 287008 and 285413, located at No. 30 San Antonio St., San Francisco del Monte, Quezon City.

Spouses Basa did not pay the loan despite repeated demands. To collect its credit, the NHA, on August 9, 1990, filed a verified petition for extrajudicial foreclosure of mortgage before the Sheriffs Office in Quezon City.

After notice and publication, the properties were sold at public auction where NHA emerged as the highest bidder.

April 16, 1991, the sheriffs certificate of sale was registered and annotated only on the owners duplicate copies of the titles in the hands of the respondents, since the titles in the custody of the Register of Deeds were among those burned down when a fire gutted the City Hall of Quezon City.

On April 16, 1992, the redemption period expired, without respondents having redeemed the properties.

NHA filed a petition for the issuance of a Writ of Possession and it was granted by the RTC.

Spouses Contention: They were still entitled to redeem the same since the one-year redemption period from the registration of the sheriffs certificate of foreclosure sale had not yet prescribed. Citing Bernardez v. Reyes and Bass v. De la Rama, respondents theorized that the instrument is deemed registered only upon actual inscription on the certificate of title in the custody of the civil registrar. Since the sheriffs certificate was only inscribed on the owners duplicate certificate of title, and not on the certificate of title in the possession of the Register of Deeds, then there was no effective registration and the one-year redemption period had not even begun to run.

NHA Contention: Respondents right of redemption had long expired on April 15, 1992 since the certificate of sale was inscribed on their TCT a year earlier, or on April 16, 1991. It pointed out that the RTC had already ruled that respondents right of redemption was already gone without them exercising said right. Since said order had already attained finality, the ruling therein could no longer be disturbed.

CA Decision: It declared that the period of redemption had not expired as the certificate of sale had not been registered or annotated in the original copies of the titles supposedly kept with the Register of Deeds since said titles were earlier razed by fire. Taking its cue from Bass v. De la Rama where the Court purportedly made a ruling that entry of a document, such as sale of real property, in the entry book is insufficient to treat such document as registered, unless the same had been annotated on the certificate of title; the Court of Appeals went on to say that the entry of the certificate of sale in the owners duplicate of the titles could not have been sufficient to register the same since anyone who would wish to check with the Register of Deeds would not see any annotation. Thus, entry made on the owners duplicate of the titles cannot be considered notice that would bind the whole world.

Issue: WHETHER OR NOT THE ANNOTATION OF THE SHERIFFS CERTIFICATE OF SALE IN THE PRIMARY ENTRY BOOK OF THE REGISTER OF DEEDS AND ON THE OWNERS DUPLICATE TITLE IS SUFFICIENT COMPLIANCE WITH THE REQUIREMENT OF LAW ON REGISTRATION.

Held: SUPREME COURT: Finds that the Court of Appeals committed reversible error in ruling that the annotation of NHAs sheriffs certificate of sale on the duplicate certificates of title was not effective registration and in holding that respondents redemption period had not expired.A. Entry in the primary book produces the effect of registration.Primary Entry Book - is a record of all instruments, including copies of writs and processes, affecting registered lands, which are entered by the Register of Deeds in the order of their filing, upon payment of the proper fees.* Section 56 of the Property Registration Decree says that deeds relating to registered land shall, upon payment of the filing fee, be entered in the primary entry book also called day book with a notation of the date, hour and minute of reception, and they shall be regarded as registered from the moment so notedB. There is effective registration once the registrant has fulfilled all that is needed of him for purposes of entry and annotation, so that what is left to be accomplished lies solely on the register of deeds.

C. The act of registration shall be the operative act to convey or affect the land in so far as third persons are concerned. REPUBLIC VS. RAVELO

*A person dealing with registered land may thus safely rely on the correctness of the certificate of title issued therefore, and he is not required to go beyond the certificate to determine the condition of the property but, where such party has knowledge of a prior existing interest which is unregistered at the time he acquired a right thereto, his knowledge of that prior unregistered interest would have the effect of registration as regards to him

D. Constructive notice is also created upon registration of every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land. It must be noted that computation of the prescriptive period of any cause of action starts from the date when the cause of action accrues.

AFP-MBA vs SANTIAGOFacts: A Notice of Levy on Attachment on Real Property levying all the rights, claims, shares, interests and participation of EBR Realty Corporation in the real property covered by Transfer Certificate of Title No. PT-79252.

Notice of Levy was presented for registration in the Registry of Deeds of Pasig City. The Notice was entered in the Primary Entry Book under Entry No. PT-1305. However, it was not annotated on TCT No. PT-79252 because the original copy of said title on file in the Registry of Deeds was not available at that time. Aniana Estremadura, the employee who examined the notice of levy, kept the said document in the meantime hoping some later days said title may be found as at the time we were yet in turmoil or in disarray having just transferred from our old office.

6 days after the presentation of the Notice of Levy, a Deed of Absolute Sale dated February 24, [1994], executed by EBR Realty Corporation in favor of Ines B. Santiago involving the same parcel of land covered by TCT No. PT-97252 was presented for registration and entered under Entry No. PT-1653. The deed of sale was examined by the same employee who examined the notice of levy, but she failed to notice that the title subject of the sale was the same title which was the subject of the notice of levy earlier presented.

Nevertheless, when the Register of Deeds discovered the error he immediately sent a letter dated October 24, 1994 to Ms. Ines B. Santiago requesting her to surrender the document so that he can take appropriate rectification or correction but Ms. Santiago refused to surrender the documents and owners duplicate of said title.

Held:

In involuntary registration, such as an attachment, levy upon execution, lis pendens and the like, entry thereof in the day book is a sufficient notice to all persons of such adverse claim

The entry of the notice of levy on attachment in the primary entry book or day book of the Registry of Deeds on September 14, 1994 is sufficient notice to all persons, including the respondent that the land is already subject to an attachment. The earlier registration of the notice of levy on attachment already binds the land insofar as third persons are concerned. The fact that the deed of absolute sale was dated February 24, 1994 is of no moment with regard to third persons.SEC. 52. Constructive notice upon registration. Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.Under the aforesaid provisions, the act of registration is the operative act to convey or affect the land insofar as third persons are concerned. Constructive notice is also created upon registration of every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land.

Superiority and preference in rights are given to the registration of the levy on attachment; although the notice of attachment has not been noted on the certificate of title, its notation in the book of entry of the Register of Deeds produces all the effects which the law gives to its registration or inscription.

Respondent cannot be considered an innocent purchaser for value. Under the rule of notice, it is presumed that the purchaser has examined every instrument of record affecting the title. Such presumption is irrebuttable. He is charged with notice of every fact shown by the record and is presumed to know every fact shown by the record and to know every fact which an examination of the record would have disclosed. This presumption cannot be overcome by proof of innocence or good faith.E. It is only the act of registering the instrument in the RD for the province or city where the land lies which is the operative act that conveys ownership or affects the land insofar as 3rd persons are concerned.

F. The act of registration creates constructive notice to the world of such voluntary or involuntary instrument or court writ or possess.

C. FORMAL AND PROCEDURAL REQUISITES FOR REGISTRATION IN GENERALA. Formal Requisites the full name , nationality, residence and postal address of the grantee;

the name of other person acquiring or claiming an interest under such instrument;

State whether the grantee is married or unmarried, and if married, the name in full of the husband or wife. If the grantee is a corporation or association, the instrument must contain a recital to show that such corporation or association is legally qualified to acquire private ands

B. All deeds and voluntary instruments shall be presented with their respective copies and shall be attested and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person presenting them.

C. Presentation of owners duplicate upon entry of new certificate

No voluntary instrument shall be registered by the Register of Deeds unless the owners duplicate certificate is presented together with such instrument, except in some cases or upon order of the court for cause shown.

When land covered by a Torrens title is sold, registration is accomplished only when the owners duplicate certificate is surrendered to the Register of Deeds for cancellation and a new certificate is issued in accordance with Section 53 of the Property Registration Decree. When the land which is the subject of the sale is thus registered in the name of the purchaser, registration takes effect retroactively as of the date when the deed, or conveyance, was noted in the entry book of the Register of Deeds

An original owner of a registered land may seek the annulment of a transfer thereof on the ground of fraud, such a remedy is without prejudice, however, to the rights of any innocent holder for value of a certificate of title.

A forged deed may be the root of a valid title in the hands of a bonafide purchaser or mortgagee.

D. Nature of the Primary Entry BookEach Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration.

Registration of Deeds of Sale or Conveyance and Transfers Conveyance of Entire Property an owner who desires to convey the land to another shall execute the proper deed of conveyance, in proper form , and present the same, together with the owners duplicate certificate to the Register of Deeds for entry and registration The Register of Deeds shall note upon the original and duplicate certificate the following: a) date of conveyanceb) volume and page of the registration book in which the new certificate is registered, and c) a reference by number to the last preceding certificate The original and owners duplicate of the grantors certificate shall be stamped cancelledConveyance of a Portion of Property RULE: The Register of Deeds shall not issue any transfer certificate to the grantee until a plan of the land showing the portion or portions into which it has been subdivided and the corresponding technical descriptions shall have been verified and approved pursuant to Section 50 of P.D. 1529. However, by way of memorandum the deed of conveyance may be annotated on the grantors certificate. pending approval of the plan no further registration or annotation of any deed or voluntary instrument affecting the unsegregated portion shall be made by the Register of Deeds except if such portion was purchased from the government or any of its instrumentalitiesWhen is a new certificate of title issued to the grantee? upon approval of the plan and the technical descriptions of the specific portions and the same has been filed with the office of the Register of Deeds for annotation on the corresponding certificate of title and upon cancellation of the grantors certificate of title as to said portion at the grantors option his certificate of title may be cancelled totally and a new one is issued to him for the remaining portion of the land

Land has been Subdivided into Several Lots upon the request by the grantor, may, instead of cancelling his certificate of title the Register of Deeds simply issue in his name a new certificate of title for the remaining unconveyed lots, enter on said certificate and on the owners duplicate a memorandum as to the fact of conveyance of a portion of the land, the issuance to the grantee of a transfer certificate of title for said portion, and the cancellation of the grantors certificate insofar as said portion is concerned

Carry Over of Encumbrances Rule: at the time of transfer of the registered land, all subsisting encumbrances or annotations appearing in the registration book and noted on the certificate of title shall be carried over and noted on the new certificate of title Exception: if the encumbrances or annotations are simultaneously released or discharged Purpose: to show that the grantee obtained the land or portion thereof subject to subsisting encumbrances attached to the title of his grantorEffects of Registration the registration of a voluntary sale of land is the operative act that transmits or transfers title (Villaluz vs. Neme, 7 SCRA 27) the acquisition of the land in question is governed by the Public Land Act No. 141 and the Land Registration Law Act No. 496 and considering that the deed of sale had not been registered in accordance with the said laws, the same did not constitute a conveyance which would bind or affect the land when a portion of the land is sold and the sale is annotated in the owner-sellers title, the buyer becomes the owner of the portion as of the registration of the sale despite title being in the name of the owner-seller (Alarcon vs Bidin, 120 CSRA 390)- although title to the disputed property is still in the name of Roberto Alarcon, it has been subjected to the registration in 1963 of the sale made by him to Esteban Sergas. Technically, therefore, the latter became the owner in 1963 of the portion of the land sold to him.

Rule extends to sale of real estate as a result of foreclosure or execution sale (Campillo vs. CA, 129 SCRA 513)- a sale of real estate, whether made as a result of a private transaction or of a foreclosure or execution sale, becomes legally effective against third persons only from the date of its registration, the act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned

Buyer is not required to go beyond the certificate of title

the purchaser is only charged with notice of the burdens in the property which hare noted on the face of the title (Ibarra vs Ibarra Sr., 156 SCRA 616)- where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, was sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the Court held that the purchaser acquired a valid title to the land even as against the heirs of the deceased spouse.

mere registration is not enough, good faith must concur (Vda. De jomoc vs. CA, 200 SCRA 74)

- When they (spouses Lim) registered the sale on April 27, 1983 after having been charged with notice oflis pendensannotated as early as February 28, 1983 (the same date of their purchase), they did so in bad faith or on the belief that a registration may improve their position being subsequent buyers of the same lot. Under Article 1544, mere registration is not enough to acquire new title. Good faith must concur.

In Duran vs IAC, good faith has been defined as consisting in the possessor's belief that the person from whom he received the thing was the owner of the same and could convey his title, there is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another. Good faith purchase is availed only in cases involving registered lands and not applicable to sales involving unregistered land. (David vs Bandin, 149 SCRA 140) As the record shows, petitioners (spouses David) bought the property when it was still unregistered land. The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases an unregistered land does so at his peril His claim of having bought the land in good faith Buyer responding to a newspaper advertisement is in good faith (Villamil vs Villarosa, April 7, 2009)- Villarosa merely responded to a newspaper advertisement for the sale of a parcel of land with an unfinished structure located in Tierra Pura, Tandang Sora, Quezon City where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto

Exceptions When there exists important facts that would create suspicion that would excite a reasonable man to go beyond the present title and to investigate those that preceded it.(Eagle Realty Corporation vs Republic, July 24, 2008) - As correctly observed by the public respondent, the property covered by the void titles was transferred from Medina to petitioner with unusual haste. Only 8 months lapsed since OCT No. 129 was issued on July 7, 1983 until it was transferred to petitioner on February 22, 1984. The property was transferred to petitioner from Reyes only more than five months after she herself acquired the property. These circumstances, plus the fact that the subject property is a vast tract of land in a prime location, should have, at the very least, triggered petitioners curiosity.Moreover, petitioner is a corporation engaged in the real estate business. A corporation engaged in the buying and selling of real estate is expected to exercise a higher standard of care and diligence in ascertaining the status and condition of the property subject of its business transaction.

Failure to make the necessary inquiries as facts may warrant.(Egao vs CA, 174 SCRA 484)- The law requires a higher degree of prudence from one who buys from a person who is not the registered owner, when the land object of the transaction is registered land. While one who buys from the registered owner need not look behind the certificate of title, one who buys from another who isnot the registered owner is expected to examine not only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to transfer the land. Failing to exercise caution of any kind whatsoever is tantamount to bad faith.

Presence of strong indications to impel closer inquiry as dictated by common sense. (Francisco vs. CA, 153 SCRA 330) -That inquiry is in truth dictated by common sense, expected of a man of ordinary prudence. "The earth," it has been said, is "that universal manuscript open to the eyes of all. When a man proposes to buy or deal with realty his first duty is to read this public manuscript, that is, to look and see who is there upon it, and what his rights are. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.

Purchase of land not from the registered owner but from someone whose name is only annotated as a buyer at the back of the owners copy of the title. (Quiniano vs CA, 39 SCRA 221)- Where a person buys land not from the registered owner but from one whose right to the land has been merely annotated on the certificate of title, and such purchaser merely had his deed of sale annotated on the certificate of title, he is not considered a 'subsequent purchaser of registered land who takes certificate of title for value and in good faith and who is protected against any encumbrance except those noted on said certificate'.

A purchaser of a land whose title contains a notice of lis pendens is a purchaser in bad faith. (PNB vs. CA, 98 SCRA 207)

A statement that buyers purchased the land with full knowledge of the flaws and defects in the title of their vendors, enough proof of bad faith. (Bernales vs. CA, 166 SCRA 519)

A buyer who purchases a land with full knowledge of a previous sale to another person cannot be considered in good faith notwithstanding that the second sale was registered. (Vda. De Jomoc vs. CA, 200 SCRA 74)

e. DOUBLE SALES Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the persons who may have first taken possession thereof in good faith, if it should be movable property.Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.Rules of preference in case of Double Sale. a. Personal Property Possessor in good faith.b. Real Property: 1. Registrant in good faith;2. Possessor in good faith;3. Person with the oldest title in good faith.Registration here requires actual recording: hence, if the property was never realty registered as when the registrar forgot to do so although he has been handed the document, there is no registration. The rule as to registration covers all kinds of immovable. Including land, and makes no distinction as to whether the immovable is registered under the Land Registration Law (with therefore a Torrens Title) or not so registered. But insofar as said registered lands are concerned, Art. 1544 is in perfect accord with the Land Registration Act, Sec. 50 of which provides that no deed, mortgage, lease, or other voluntary instrument except a will, purporting to convey or to affect registered land shall take effect as a conveyance or bind the land until the registration of such deed or instrument. Thus, as to lands, covered by a Torrens Certificate of Title, a deed of sale is considered registered form the moment it is entered or recorded in the entry or day book of the Register of deeds. If the land is registered under the Land Registration Act (and therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED, as the term is used under Art. 1544. A mere preventive precautionary notice (anotacion preventive) is not equivalent to registration, UNLESS within 30 days thereafter there is made an actual recording. Such preventive notice in good only against subsequent (not prior) transferees, and even here for only 30 days.Art. 1544 applies when the parcel of land is sold by one seller to two different persons. GENERAL RULE: First sale registered in good faith prevails.DBP vs. Mangawang, 11 SCRA 405Facts: Gavino Amposta applied with the Director of Lands for a homestead patent over a parcel of land located in Balanga, Bataan. While his petition was being heard, the Government instituted cadastral proceedings covering, among others, the land being claimed by Amposta. Amposta prayed that th land be granted to him. An Original Certificate of Title (No. 100) was issued to him by the Governor-General. Shortly after, the cadastral court issued OCT 2668 covering the same land to Amposta. Amposta firs sold the property to Santos Camacho. The latter sold the same to Bonifacio Camacho. The land was mortgaged by Camacho to the DBP. Since he could not perform his obligation, the disputed land was sold to the DBP. DBP registered the land and was issued a TCT. Meanwhile, Amposta sold the property using OCT No. 100, sold the same land to Lazaro and Arsenio Mangawang. The two were able to register the land on a later date. The Mangawang brothers took possession of the land. DBP filed a case for reconveyance and damages. The CFI of Bataan ruled in favour of the Mangawang brothers.Issue: Whether or not DBP has better rights to the property than the Mangawang brothers.Ruling: The Supreme Court reversed the decision of the CFI and declared DBP the owner of the lot. The Supreme Court ruled that the case is one of double sale and as such, Article 1473 (now Aticle 1544) shall be followed. According to said article, the first to register the land is the owner. DBP was fist to register the land.In case of double sale of land in good faith, ownership of the land passes to the buyer who first registered sale in the Registry of Deeds.Campillo vs. CA, 129 SCRA 513Facts: Tomas de Vera was the owner of two parcels of land in Tondo, Manila. In 1961, de Vera sold the lands to Simplicio Santos. Santos however did not register the sale in the Registry of Deeds, which means that the land was still under de Veras name.On the other hand, de Vera was indebted to Campillo. Campillo obtained a judgment for sum of money. De Veras 3 parcels of land, including those sold to Santos were levied in 1962 in favor of Campillo. Campillo acquired the land and he was able to have the lands be registered under his name.Issue: Who has better right over the property: Santos who first bought it w/o registering it or Campillo who subsequently purchased it at a public auction and have it registered under his name?Ruling:Campillo has the right over the said properties. It is settled in this jurisdiction that a sale of real estate, whether made as a result of a private transaction or of aforeclosureor execution sale, becomes legally effective against third persons only from the date of its registration. Santos purchase of the two parcels of land may be valid but it is not enforceable against third persons for he failed to have it registered.Campillo is a purchaser in good faith as he was not aware of any previous sale for Santos never caused the annotation of the sale.Section 51, PD No. 1529, otherwise known as the Property Registration Decree, provides as follows:Section 51. Conveyance and other dealings by registered owner. An owner of registered land may convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary instrument except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make registration.The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies.The purchaser (Campillo) in the execution sale of the registered land in suit acquires such right and interest as appears in the certificate of title unaffected by prior lien or encumbrances not noted therein. This must be so in order to preserve the efficacy and conclusiveness of the certificate of title which is sanctified under our Torrens system of land registration.

As between original parties.Gatioan vs. Gaffud, 27 SCRA 706 The SC ruled: We have laid the rule that where two certificates of title are issued to different persons covering the same land in whole or in part, the earlier in date must prevail as between original parties and in case of successive registrations where more than one certificate is issued over the land, the person holding under the prior certificate is entitled to the land as against the person who rely on the second certificate. The purchaser from the owner of the later certificate and his successors, should resort to his vendor for redress, rather than molest the holder of the first certificate and his successors, who should be permitted to rest secure in their title. The one who purchases real property with knowledge of a defect in the title of his vendor cannot claim that he acquired title thereto in good faith as against the owner or of an interest therein.Good faith registration essential.Bergado vs. CA, 173 SCRA 497Facts:Disputed is a lot situated in Pangasinan and covered by an OCT in the name of Alejandro Trinidad and Aniceta Soriano. It was inherited by Marciana Trinidad, their sole heir. She transferred it by virtue of anEscritura de Compraventadated May 3, 1928, to Pedro Bergado and Justina Galinato, the petitioners parents. She then conveyed it again, this time through a Deed of Sale to the Parent-Teacher Association of the Urdaneta Community High School.The property subject of this case is claimed by both the petitioners and the Republic under two separate deeds of sale executed by the same vendor The petitioners claim the property by right of inheritance from their parents. The Republic says the land was donated to it by the said PTA.The Republic was sustained by the trial court and the Court of Appeals. The petitioners are now before us, contending that the courts below have erred and so should be reversed.The petitioners argue that neither prescription nor laches can operate, against them because their title to the property is registered under the Torrens system and therefore imprescriptible. Additionally, they contend that in cases of double sale, assuming the sale to the private respondent was also valid, the buyer who registers the property first shall be preferred. Issue: Whether or not their alleged right was superior to the title asserted by the Republic to the property in questionRuling:WHEREFORE, the petition is DENIED. The record shows that the disputed property had been in the possession of the PTA since it acquired the same by virtue of the deed of sale, and of the Republic of the Philippines since the date of the deed of donation executed in its favor. The PTA and later the Republic had been constructing improvements on the land which certainly could not have escaped the attention of the petitioners. During all that time, the land was also enclosed with a barbed wire fence and later with an adobe wall erected by the school administration. The fence and later the wall symbolized the PTAs exclusive claim of ownership to the disputed propertyClearly applicable is Article 1544 of the Civil Code providing as follows:If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith,if it should be movable property.Should it be immovable property, the ownership shall belong to the person acquiring it whoin good faithfirst recorded it in the Registry of Property.Should there be no inscription, the ownership shall pertainto the person who in good faith was first in the possession;and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. (Emphasis supplied.)The inscription of theEscritura de Compraventain 1964 produced no legal effect because it was made in bad faith. Ownership should therefore vest in the respondent Republic of the Philippines because it was first in possession of the property in good faith. If any recourse is still available to the petitioners, it definitely is not against the Republic of the Philippines. Their claim for satisfaction on which we do not rule at this time may be addressed only to Marciana Trinidad who, for reasons still to be discovered, sold the same land once, and then once again, to separate purchasers.f. FORGED DEED MAY BE ROOT OF A VALID TITLE. A title procured by fraud or misrepresentation can still be the source of a completely legal and valid title if the same is in the hands of an innocent purchaser in good faith.

Heirs of Tiro vs. Philippine Estates CorporationPetition for review on certiorari assailing thedecision of the Court ofAppeals which affirms the RTC decision favouring respondentPetitioners filed a complaint for quieting ofland against herein respondents. Petitioners which happened to be siblings alleged that they arethe rightful owner of the land subject tothis dispute. Petitioners averred that they are the successors-in-interest ofthe original owners of the land andthat they were in open, continuous, exclusive and notorious possession of the land since time immemorial until theywere prevented to enter such property in 1995by persons who claimed to be thenew owners of theproperty. Based on the records of the registry of deeds, the original title named after Julian and Pedro Tiro, predecessors-in-interest of herein petitioners, have been cancelled sinceSeptember 10 1969 and have been transferred in the name ofJulio Baba and Olimpia Mesa. Thedisputed property was supported by (1) an Extrajudicial Declaration of Heir and Confirmation of Sale datedAugust 20 1969 executed by Maxim Ochea who claimed to be the only living heir of Juan and Pedro Tiro.And (2) a document entitled Deed of confirmation executed on the same date by spouses Amores who transferred the property in1947.Based on the facts and evidences presented on the case, Ochea committed fraud when she misrepresented herself. And due to that misrepresentation, the property whichwas claimed fraudulously has already been subject to five transfers. The Court ofAppeals ruled that evenassuming that the first few transfers were inbad faith, the transfer to herein respondent who acted in good faith byrelying only on thetitle and was not aware of theirregularity became root of a valid title. The indefeasibility of the Torrens title should not be used as ameans to perpetrate fraud against the rightful owner of real property.Good faith must concur with registration because, otherwise, registration would be exercise in futility.However, where good faithis established, as in the case of an innocent purchaser for value, a forged document may become the root ofa valid title. A person isconsidered in law as an innocent purchaser for value when he buys the property ofanother, without notice that some other person has a right oran interest in such property, and pays a fullprice for the same at the time of such purchase, or before he has notice of the claims or interest of some other person in the property.A person dealing with registered land may safely rely on the correctness of the certificate of title of the vendor/transferor, and the law will in no way oblige him to go behind the certificate to determine the condition of the property.The courts cannot disregard the rights of innocent third persons, for that would impair or erode public confidence in the Torrens system ofland registration. Thus, a title procured byfraud or misrepresentation can still bethe source of a completely legal and valid title if the same is in the hands of an innocent purchaser for value.i. REMEDY of the OWNER. The purchaser from the owner of the later certificate and his successors, should resort to his vendor for redress, rather than molest the holder of the first certificate and his successors, who should be permitted to rest secure in their title. (Gatioan vs. Gaffud)ii. In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title. After the entry of the decree of registration on the original petition or application, any subsequent registration procured by the presentation of a forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void. (Sec. 53, PD 1529 3rd paragraph)iii. BUT, if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser the forged deed or document may be the root of a valid title.

Solivel vs. Francisco, 170 SCRA 218The innocent purchaser for value protected by the law is one who purchases a titled land by virtue of a deed executed by the registered owner thereof, and not by virtue of a forged deed.

iv. If the certificate has been transferred to the name of the forger, same rule applies. v. Reason. The vendee has the right to rely on the correctness of the certificate of title.

Duran vs. IAC, 138 SCRA 489In this case, a mother forged a signature of her daughter in a deed of sale purpoting to sell her properties to the mother. The latter obtained titles in her name, and thereafter mortgaged the properties to the private respondents. Upon her failure to redeem the mortgage, the mortgagees foreclosed and purchased the properties at the sheriffs auction sale. The court ruled that the mortgage was valid with respect to the mortgagees because at the time of its constitution, title to the properties was already in the name of the party who had executed the mortgage (the mother). The SC declared that a fraudulent or forged document of sale may become the root of a valid title if the certificate of title has already been transferred from the name of the true owner to the name of the forger or the name indicated by the forger.

vi. Exception. Art. 1544 (Double Sale) will not apply if the owner still holds a valid and existing certificate of title covering the same property. vii. REMEDIES of VICTIM or PERSON PREJUDICED.PNB vs. CA, 187 SCRA 735 A mortgagee had the right to rely on what appeared on the certificate of title, and in the absence of anything to excite suspicion, it was under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on the face of the certificate The right or lien of an innocent mortgagee for value upon the land mortgaged must be respected and protected, even if the mortgagor obtained his title through fraud. The remedy of the persons prejudiced is an action for damages against the persons who caused the fraud, and if the latter be insolvent, an action against the Treasurer of the Philippines may be filed for recovery for damages from the Assurance fund.